If you think that Chinese knockoffs of Korean products are found only overseas, then think again. Korea is already full of second-rate pirated products. According to the Korea Auto Industries Cooperatives Association, more than 20 percent of car parts sold in Korea are fake. Selling the fakes here is only part of the process.
Chinese knock-off merchants bring their counterfeits into Korea to obscure their true country of origin, selling them on from our soil as real Korean goods. At the same time, they sell the fakes to consumers here. For example, Internet shopping sites sell "designer brand" clothing for 20 to 50 percent less than the real thing, but most of these items were churned out in China or Thailand. Cracking down on the online retailers can be difficult, authorities said. "Internet shopping malls aren't responsible for checking if the products are genuine because they're just connecting sellers with buyers," an officer with the Cyber Crime Investigation Division of the Seoul Metropolitan Police Agency said.
It's not just clothes and car parts, either. Smuggled Chinese cigarettes, packaged as domestic brands like Raison and THE ONE, are proffered at W1,000(US$1=W939) to W2,000 a pack to low-income smokers in the back alleys of Seoul's Jongno Street. Even Korean electronics are victimized. In 2005, a Chinese knock-off of a Korean MP3 player, the Mpio FL300, was sold openly at the Yongsan Electronic Plaza in Seoul.
◆ Increasingly Sophisticated Operations
The rise of fakes here is thanks to sophisticated production and distribution techniques. A typical case involved a gang of counterfeit cellphone makers. Before they were arrested by police from Seoul's Hyehwa Station last month, these con artists had sold about 20,000 cellphones for an intake of W7 billion last year. The authorities were stunned to learn of their international operation, which involved gangsters in Korea and China working in tandem. They collected functioning components from used cellphones to make internal circuit boards, then wrapped them with fake Anycall cases from China.
Their next step was selling their products at international shopping malls, where the monitoring of watchdog agencies is slack. "It's becoming harder and harder to crack down on the knock-off market because of their advancements in manufacturing and distribution," said Ahn Dong-hyun, the chief of Hyehwa Police Station's Cyber Crime Investigation Team.
Victimized companies are clamoring for government action, asking for a campaign to educate consumers and manufacturers about the issue. Above all, they say, the Chinese government needs to address the problem. Jo Hak-hee, an international trade policy analyst from the Korea International Trade Association, said, "Whenever we ask them to crack down on factories making fakes, the local Chinese governments find excuses, saying, 'China is too vast to do that.'"
